Police are investigating suspicions that Finance Minister Abraham Hirchson was aware of alleged embezzlement at a non-profit association affiliated to the National Workers Histadrut Union, but failed to report it.

On Tuesday, police arrested five former employees of "Nili", a non-profit organization that operates seven educational institiutions of the national worker's labor union, on suspicion of involvement in the embezzlement of 5.5 million NIS.

In the meantime, Hirchson is under investigation, and if there is reason to suspect he was involved in the embezzlement, he will be called in for questioning on charges of failure to report a crime.

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The investigation was revealed to the public a week ago on channel 10. According to the report, in 2003, the General Secretary of Nili, Ovadia Cohen, told Hirchson that he took money from the organization in order to pay off debts he owed to loan sharks.

Investigators suspect that Hirchson removed Cohen from his post immediately after hearing of the embezzlement, but decided not to open an investigation into the incident or to contact the police.

Some two years after Cohen's dismissal, an accountant discovered that 5.6 million NIS was missing from the organizations coffers with no explanation whatsoever. The accountant suggested that the company turn to the police, and after the complaint was issued, all evidence was submitted to the attorney general.

Hirchson has not yet been questioned, although the suspicions prove to have some substance, he could face investigation for failing to report the crime.

The National Workers Histadrut Union, independent of the Labor-allied Histadrut labor federation, was founded by the forerunner of the Likud party.

Hirchson was a member of Likud before jumping ship to join Ariel Sharon's new Kadima party.